Tongaat Hullet's Zim operation hit by low prices, reduced output

Harare - Tongaat Hulett's Zimbabwe operations recorded significantly reduced revenues and profits for the year to end-March 2016.

A result statement released on Monday by parent company Tongaat Hullet [JSE:TON] showed that the Zimbabwe operations recorded a 21% revenue drop to $257m, down from $314m in the prior comparative year.

After adjusting for stock movements, revenue was however down by 8.04% to $263m from $286m prior year comparative.

Sugar sales for the period under review slipped to 403 000 tonnes, down from 491 000 prior in FY2015.

Export volumes were lower after a drop in international sugar prices.

“There were both lower export sales volumes and lower export prices while domestic market sales volume levels have been maintained,” said the group.

Operating profit was 97% lower after operating profits, including wages, increased to $141m from $135m.

The group said US dollar strength had exerted pressure, particularly in respect of US dollar-based costs (such as wages and salaries) and euro-based revenues.

Production also fell by 7.42% to 412 000t from 445 000t, with the group attributing the performance to poor growing conditions as a result of low rainfall, restricted irrigation levels and, to a lesser extent, electricity unavailability.

The drought is expected to continue impacting total sugar production in 2016/17, while the quantum of irrigation has been reduced as a measure against poor rainfall and low dam levels.   

ZAR/USD
17.00
(-0.36)
ZAR/GBP
21.21
(-0.30)
ZAR/EUR
19.12
(-0.30)
ZAR/AUD
11.81
(-0.62)
ZAR/JPY
0.16
(-0.21)
Gold
1774.43
(-0.02)
Silver
18.05
(+0.69)
Platinum
807.99
(+0.12)
Brent Crude
42.92
(+2.64)
Palladium
1914.00
(+1.46)
All Share
54521.90
(-0.17)
Top 40
50179.89
(-0.26)
Financial 15
10150.02
(-0.64)
Industrial 25
76554.73
(+0.52)
Resource 10
50138.02
(-1.24)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1575 votes
I am taking a hit, but should be able to recover in the next year
23% - 2068 votes
My finances have been devastated
34% - 3086 votes
It's still too early to know what the full effect will be
25% - 2240 votes
Vote